Global PC sales rebounding

Global PC sales are on the rebound despite worldwide economic
uncertainties, with iMac frenzy expected to double Apple's shipments while Dell continues to gain ground, according to
a new report.

Woldwide sales grew 11 percent last quarter, and are expected to grow 12.2
percent for the second half of 1998, with strong U.S. and European growth
outweighing Asian and Russian instability.

Most vendors have resolved the inventory gluts which led to fire-sale
prices and shrinking margins in the first half of the year, according to
market research firm International Data Corporation. Despite ongoing
currency problems in Asian and more recently Eastern European markets,
unit volumes and profit margins appear to be stabilizing.

"It's warming up, relative to what was happening in the first half of the
year. There's still some negatives in Asia and Russia, but that's a
relatively small amount of worldwide sales," said Bruce Stephen, an IDC
analyst.

Also, while not breaking into the top five vendors yet, the most improved
player of the second half of 1998 goes to Apple, according to IDC, as
the momentum of the recently released iMac boosts sales figures for the
second half of the year.

"IDC believes that in Quarter 3 they will have the greatest share gain of
anybody--including Dell--in terms of percentages," said Roger Kay, another
IDC analyst. "They could double their shipments," because of iMac demand.

Although still seventh in U.S. and worldwide sales, Kay predicts that the iMac
will propel Apple into the top five in the U.S., and possible worldwide,
next quarter.

"There's very little cannibalism likely--the iMac doesn't really pitch to
same market as its [G3 computers], so it is all additional business
for them."

Compaq, whose bloated inventory levels
led to pricing cuts which reverberated throughout the industry, was number
one worldwide and in the U.S., in terms of units shipped, Stephen said. "We
think they'll get stronger, now that they've cleared up the inventory
logjam which was disrupting their flow of business and led to radical
pricing actions. We think they're coming back stronger."

Compaq continues to face challenges from direct seller Dell, who has managed to resist getting
mired in the sub-$1,000 price wars, posting more than 70 percent growth in unit
shipments, year over year. "Dell still has tremendous momentum," Stephen
noted. "They're kind of in a zone unto themselves."

Hewlett-Packard also posted strong
numbers, with almost 20 percent growth for the second half of 1998, fueled
by momentum in the commercial market, Stephen said. The market wasn't rosy
for every vendor, though. IBM slipped 4.1
percent, losing ground in the business market to Dell. Packard Bell NEC continued its
downward spiral, posting negative 8 percent growth.